2 min read
16-Oct-2024

Your CIBIL Score is an important factor when it comes to a lender approving or rejecting your application for a loan. While you can get approval on loans such as a personal loan with a low CIBIL Score, it is in your best interest to apply once you improve it. A good score will help you get an instant personal loan at lower interest rates. So, here are 5 ways to give your CIBIL Score a boost.

5 steps to improve your credit score

  • Clear all your existing debt
  • Pay your EMIs on time
  • Limit your credit utilisation
  • Report discrepancies in your credit report, if any
  • Borrow a mix of credit

Clear all your existing debt

Having outstanding debt is noted on your CIBIL report, and until you repay it, will negatively impact your CIBIL credit score too. So, it is essential that you clear outstanding debts to boost your score. To do this, repay your debt within your chosen timeline or make prepayments to foreclose your loan. Using credit responsibly will improve your score.

Additional Read: Personal loan for low CIBIL score

Pay your EMIs on time

Making EMI payments isn’t enough. If you don’t make payments on time, it will pull down your CIBIL credit score. Delayed EMI payments are noted in your CIBIL report and include details of the number of days of delay. Here, the best thing to do is to set up an automatic transfer from your bank account to facilitate timely payment. Then, be sure that your account has enough funds to allow the transfer. This will ensure that you don’t incur a bounce charge and will improve your CIBIL Score too.

Limit your credit utilisation

Utilising too much credit shows lenders that you are unable to live in line with your income. So, while utilising credit, it is crucial to stay below the limit. It is also important that you use only as much credit as you can repay. In order to do this, make sure your credit usage doesn’t exceed half your income amount. You can also take measures such as paying your credit card balance in full and not using your credit card up to the full limit consistently.

Additional Read: CIBIL score calculation

Report discrepancies in your credit report, if any

Occasionally, there may be discrepancies in your credit report. For example, your CIBIL credit score may be low as your home loan lender hasn’t informed CIBIL of the latest payment details. So, a good practice is to check your credit score regularly and have any possible discrepancies corrected at the earliest. Bajaj Finserv, one of India’s leading NBFCs, also allows you to perform a free CIBIL check. Simply visit the Bajaj Finserv website and enter your basic details to check your credit score for free.

Borrow a mix of credit

If you do not borrow credit, you will not have a credit score. Also, if you borrow only one type of credit, it will not increase your CIBIL Score. Thus, to improve your CIBIL Score, borrow a mix of credit. This involves taking secured and unsecured credit and repaying it diligently. Establishing credit experience will surely benefit your score.

In general, refrain from making ad-hoc financial decisions. Always try to take and use credit responsibly to maintain a good CIBIL credit score. Also, remember that once you implement these measures, it may take around 6 months to a year for your score to show improvement.

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Frequently asked questions

Can we increase CIBIL score in 10 days?

While it's possible to see minor improvements in a short time, significantly increasing your CIBIL score in just 10 days is unlikely. Building a strong credit history takes time and consistent responsible financial behaviour.

How to get 800 CIBIL score?

Achieving an 800 CIBIL score requires a combination of factors, including a long history of on-time payments, low credit utilization, and a diverse mix of credit accounts. Consistently making payments on time, keeping your credit balances low, and maintaining a variety of credit accounts can help you reach this goal.

How to increase CIBIL score from 600 to 750 in 30 days?

While it's challenging to make a significant jump in 30 days, you can start by focusing on immediate actions like paying off outstanding balances, disputing any errors on your credit report, and using your credit responsibly. Over time, these steps can contribute to a gradual increase in your CIBIL score.

How can I get 900 CIBIL score?

A 900 CIBIL score is considered exceptional and requires a near-perfect credit history. It involves consistently making on-time payments, maintaining low credit utilization, having a diverse mix of credit accounts, and avoiding late payments or defaults. While it may take years of responsible financial behaviour to reach this level, it's a worthwhile goal to strive for.

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